Buffett Brain · Research note
Score updated 5 Oct 2026 · analysis from 8 Sept 2026
FERG· Industrials
Ferguson
Ferguson's strong ROIC of 17.7% is sector-leading, but valuation and margins raise concerns.
Buffett fit
Partial fit
Owner
40
Durability
83
Management
79
Price
39
Score updated 5 Oct 2026 · analysis from 8 Sept 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Industrials stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
Owning 100% of Ferguson, we'd focus on maintaining its sector-leading of 17.7% and managing its debt/equity ratio of 1.04 carefully.
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Ferguson's durability is supported by consistent profitability over the last five years and a manageable EPS max decline of -6.56%.
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Ferguson's has been effective, with a yield of 2.03% and a dividend yield of 1.88%.
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With an yield of 3.6% and a of 21.6, Ferguson's valuation is on the higher side.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1 of 17.7% is top-quintile in the Industrials sector.
- 2Interest coverage of 15.4 indicates strong ability to service debt.
- 3Consistent profitability over the last five years.
- 4Share count CAGR of -2.87% shows effective strategy.
Concerns
5- 1 of 30.7% is below sector top-quintile cutoff of 43.4%.
- 2 of 9.2% is below the sector's top-quintile 17.8%.
- 3 of 21.6 suggests limited .
- 4Negative dividend CAGR of -17.11% raises questions about future payouts.
Price history
$223+56.8%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Ferguson plc distributes a wide range of plumbing and heating products across the U.S. and Canada, serving residential, commercial, and industrial markets. With a network of 1,679 branches and 11 distribution centers, it offers services such as consultation, project management, and delivery. The company's revenue of $30.76B is driven by its extensive product offerings and service integration. Unit economics reflect a of 30.7%, which is below the sector's top-quintile threshold.
How this analysis has moved
The call has held across 3 reviews.
Sep 27, 2026 → Oct 5, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
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